Definition
Money customers owe you for goods or services you've already delivered. Think of it as an IOU sitting in your wallet—it's yours, but you haven't collected cash yet.
A
Accounts Receivable (A/R)
Related Terms
Allowance for Doubtful Accounts
A contra-asset account that estimates how much of your Accounts Receivable you'll never collect. It's like setting aside a rainy-day fund for customers who ghost you. Appears on the balance sheet as a reduction to A/R.
Bad Debt Expense
The cost of doing business on credit—recognizing that some customers won't pay what they owe. Appears on the income statement as an operating expense.
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